Apple WWDC & Euro Slumps After EU Elections

Equities

The FTSE 100 saw a slight decline, ending the day down 0.2%. Among UK stocks, M&G Plc stood out with a notable increase of 2.4% in its share price. This uplift followed an upgrade by JP Morgan from 'neutral' to 'overweight', sparking investor optimism about the company's future performance. Meanwhile, the FTSE 250 also experienced a downturn, falling 0.5%. This marked the second consecutive session of losses for the index, reflecting broader concerns that are affecting mid-cap UK stocks.

In the US, market indices recorded modest gains with the S&P 500 inching up by 0.3% to close at record highs. This subtle yet positive movement was bolstered by favourable performance in key tech stocks, despite a generally cautious investor stance ahead of significant economic updates. Notably, Nvidia saw its shares climb by 0.7% after a 10-for-one stock split, fuelling speculation about its potential inclusion in the Dow Jones Industrial Average.

Apple’s shares, however, slipped by 1.9% as the company kicked off its annual developer conference. Despite the initial decline, there remains keen interest in Apple's strategic integration of artificial intelligence into its product lineup, which could have long-term implications for the stock.

Southwest Airlines jumped 7% after news that Elliott Investment Management had acquired a nearly $2 billion stake in the airline.

Additionally, Diamond Offshore Drilling's stock surged by 10.9% after Noble announced its acquisition of the company in a deal valued at $1.59 billion.

Forex & Commodities

The US dollar approached a one-month high against the euro and a one-week peak versus the yen as markets anticipated key US inflation data and Federal Reserve interest rate forecasts.

The euro comes off the back of its worst 2-day performance against the dollar since Feb 2023 on the geopolitical fallout post EU elections that saw populist parties surge - forcing a snap election in France and for the Belgium Prime Minister to resign.

The British pound held steady at $1.27355, awaiting UK labour market data expected to indicate a slowdown in employment declines.

Gold prices dipped slightly in anticipation of the US inflation report and the upcoming Federal Reserve meeting, with spot gold falling 0.2% to $2,306.38 per ounce. The decline in gold followed a significant drop on the previous Friday, influenced by robust US employment figures and news that China's central bank paused its gold buying.

Oil prices rose by approximately 3% to a one-week high, driven by optimism for increased fuel demand during the summer, despite the stronger dollar and expectations that the US Federal Reserve will maintain higher interest rates longer than previously expected. Brent futures increased by 2.5% to $81.63 a barrel, and West Texas Intermediate crude climbed 2.9% to $77.74.